Real estate investors remain bullish in Chicago’s real estate sectors despite plans to increase property taxes to fund its $250 million pension obligations as they continue their shopping spree for assets in the area, ChicagoBusiness.com reported.
The report revealed that Chicago investors recognize the property tax hike is an issue, but not a cause for alarm and to stop buying real estate portfolios in Chicago.
“I think it's an issue, but I don't think it's stopping anyone from investing in Chicago,” Mark Stern, senior vice president of acquisitions at Waterton Associates LLC, told ChicagoBusiness.com.
Joshua Behar, acquisitions analyst at Florida real estate firm Accesso Partners LLC, added to Stern’s the statement, “We're anticipating some sort of tax increase, but we don't think it will push us away from Chicago in the near term.”
The report cited a slew of transactions including the sale of a $78 million for an apartment complex in Arlington Heights, and $850 million for a River North office space.
REITs are also shopping around in the area with Acadia Realty Trust leading the way in the Gold Coast, following its acquisition of a $20.7 million building in 2012. The report said the company “wants to buy more.”
Chicago investors are drawn to Chicago’s market due to a “lack of yield-generating alternatives,” and interest rates at record lows, the report said.
It adds as modest economic growth as another reason the average and median prices are recovering and why investors opt to invest in the city.
“That all adds up to a robust market—despite the poor condition of state and city finances,” the report noted.
Citing data from Real Capital Analytics Inc., the report said that the market have posted modest and steady growth each year since the financial crunch in 2009. It noted a jump in sales from 244 sales worth $2.4 billion to 902 properties worth $15 billion. In H1 of 2014 alone, investors bought 405 properties representing over $6 billion.
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